The salary benchmarking process
Unsurprisingly, salary benchmarking relies on collecting data about job salaries so they can be compared. As with all data analysis, the more data that is collected and analysed, the more accurate and useful the data outputs are.
Across the web, there are a number of freely available resources; some industry associations publish broad salary information in annual reports and there are online programs and apps that can extract salary information at a large scale from job search and recruitment websites.
However, the widest and most robust and reliable data will always be found by commissioning or purchasing data from a specialist salary benchmarking provider – a provider like Paydata.
How does salary benchmarking work for my business?
Salary benchmarking remains one of the most effective ways for organisations to attract and retain staff. The data collected allows an evidence-based approach to setting a competitive pay structure for existing and potential employees.
Competitive and respectable pay is a key factor in employee satisfaction, and when this is high, your business benefits from reduced turnover and improved productivity. A competitive salary is also the first element in attracting key talent – without the top talent, your organisation will not get top performance.
However, in the modern employment landscape, employees are increasingly valuing more than just their salary, and a competitive salary alone may not be enough to attract and retain the people you want. The total reward package and aspects such as career progression, enhanced leave, flexible working and other aspects are also key and must be considered.
While salary benchmarking is often thought of as a preliminary to raising salaries to stay competitive, this isn’t necessarily the only outcome. It can also be used to confirm potential hiring costs or even reduce them. Salary benchmarking can help to better manage costs by ensuring you aren’t overpaying and by revealing individual roles or pay grades that are outliers within your sector, even if the majority of your salaries are within the expected range.
What salary comparison data do I need?
When deciding what salary benchmarking data you need, first you will need to decide what roles and levels you are looking to cover. Most employers employ generic roles, such as within HR, marketing, finance, etc., as standard. However, it is the specialist, more niche sector level roles which are often harder to source data on. Specialist, sector-level salary benchmarking surveys will be best for providing useful insight into how your current offer compares to your competitors and your industry as a whole.
However, if you are examining higher-level executive salaries, a specialised survey (whether that’s one tailored for executives in a sector or a bespoke one) will be required to accommodate the more complex nature of executive remuneration.
How often should salary benchmarking be carried out?
Most businesses review their salaries annually, and if you want to ensure your organisation is always offering the optimal salaries, this should be accompanied by at least some form of salary comparison survey to ensure that the review is informed and accurate. In high-growth, competitive or fast-moving sectors, pay may be reviewed every six months, while in some industries it may be more appropriate to review and adjust pay as major projects or milestones are completed.
Salary benchmarking with Paydata
We have refined our approach to building specialist salary surveys for more than 25 years, resulting in not only a large catalogue of data to build on but an extensive list of job roles.
We offer multiple specialist salary benchmarking surveys, covering salaries in a wide range of industries alongside the more generic support services such as HR and finance. Our salary database also extends to executive benchmarking, providing remuneration committees with tailored support and advice on executive pay.
Our benchmarking database goes beyond salary and into other aspects of the reward package, such as benefits, bonuses and allowances.
If our preexisting surveys don’t quite cover the areas and information you need, Paydata can also produce bespoke surveys for businesses seeking specific data in niche sectors. With a bespoke salary benchmarking survey, we will evaluate the information you require and then create a specific questionnaire to find that information as effectively as possible, which we will prepare into clear and concise reports.
Our salary benchmarking reports allows employers to break down the data in different ways to suit their needs, such as by job role across a sector (for insight into how your pay offer compares to your direct competitors), by geographic location (so you can see if your pay is competitive with other employers near you), by level (so you can view pay differentials across role level) and more.
Paydata also offers a full range of reward strategy support options to compliment our salary benchmarking. Get in touch with our team to find out more, to get advice or to make an enquiry.
